The following transactions transpire during the liquidation of the Wingler, Norris, Rodgers, and Guthrie partnership: Collected 80 percent of the total accounts receivable with the rest judged to be uncollectible. Sold the land, building, and equipment for $167,000. Made safe capital distributions. Learned that Guthrie, who has become personally insolvent, will make no further contributions. Paid all liabilities. Sold all inventory for $90,000. Made safe capital distributions again. Paid actual liquidation expenses of $11,000 only. Made final cash disbursements to the partners based on the assumption that all partners other than Guthrie are personally solvent. Prepare journal entries to record these liquidation transactions.

The following transactions transpire during the liquidation of the Wingler, Norris, Rodgers, and Guthrie partnership: Collected 80 percent of the total accounts receivable with the rest judged to be uncollectible. Sold the land, building, and equipment for $167,000. Made safe capital distributions. Learned that Guthrie, who has become personally insolvent, will make no further contributions. Paid all liabilities. Sold all inventory for $90,000. Made safe capital distributions again. Paid actual liquidation expenses of $11,000 only. Made final cash disbursements to the partners based on the assumption that all partners other than Guthrie are personally solvent. Prepare journal entries to record these liquidation transactions.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations

Section: Chapter Questions

Problem 17CE

See similar textbooks

Similar questions

Partners Nina, Ricci, and Guess, who share profit and losses in the ratio of 2:2:1, respectively, decided to liquidate. The condensed statement of financial position account balances just prior to the liquidation are: Cash-P 100,000; Other assets-P 400,000; Liabilities - P 140.000: Nina, Loan-P 10,000; Nina, Capital-P45,000: Ricci, Capital -P 105.000; Guess, Capital - P200,000. After paying the llabilities to partnership creditors, cash of P207,500 is available for distribution to partners. Any capital deficiency is made good by the deficient partner, since all three partners are personally solvent. How much was the loss on realization? how much would Nina receive in the final settlement of his interest? how much would Ricci receive in the final settlement of his interest?
Immediately prior to the process of liquidation, partners Micco, Niccum, and Orwell have capital balances of $70,000, $20,000, and $30,000, respectively. There is a cash balance of $10,000, noncash assets total $160,000, and liabilities total $50,000. The partners share net income and losses in the ratio of 2:2:1. Journalize the entries for the following liquidation using Noncash Assets as the account title for the noncash assets and Liabilities as the account title for all creditors' claims. Sold the noncash assets for $80,000 in cash. Divided the loss on realization. Paid the liabilities. Received cash from the partner with the deficiency. Distributed the cash to the partners. If an amount box does not require an entry, leave it blank.
Partners Nina, Ricci, and Guess, who share profit and losses in the ratio of 2:2:1, respectively, decided to liquidate. The condensed statement of financial position account balances just prior to the liquidation are: Cash-P 100,000; Other assets-P 400,000; Liabilities - P 140.000: Nina, Loan-P 10,000; Nina, Capital-P45,000: Ricci, Capital -P 105.000; Guess, Capital - P200,000. After paying the llabilities to partnership creditors, cash of P207,500 is available for distribution to partners. Any capital deficiency is made good by the deficient partner, since all three partners are personally solvent. how much would Nina receive in the final settlement of his interest? how much would Guess receive in the final settlement of his interest?
Slick, Tony and Sam partnership began the process of liquidation with the following account balances: Cash 16,000 Non-cash assets 434,000 Liabilities 150,000 Slick, Capital (30%) 80,000 Tony, Capital (20%) 90,000 Sam, Capital (50%) 130,000 Liquidation expenses are expected to be P12,000. After the liquidation expenses of P12,000 had been paid and the non-cash assets sold, Sam had a deficit of P8,000. Assuming all partners are personally insolvent, how much is the final settlement to Tony? P24,000 P34,800 P36,000 P37,200
Barry sold depreciable property used in his business to Ken for $192,000 cash plus a bond redeemable in 5 years for $95,000, but currently trading on the NYSE for $98,000. The property cost Barry $310,000 plus $45,000 in capital improvements and had actual accumulated depreciation at the time of the sale of $225,000. The amount of accumulated depreciation he should have taken was $205,000. Determine the amount of gain or loss recognized. Explain your conclusions including the various components of how you determined your answer.
Barry sold depreciable property used in his business to Ken for $192,000 cash plus a bond redeemable in 5 years for $95,000, but currently trading on the NYSE for $98,000. The property cost Barry $310,000 plus $45,000 in capital improvements and had actual accumulated depreciation at the time of the sale of $225,000. The amount of accumulated depreciation he should have taken was $205,000. Determine the amount of gain or loss recognized. Explain your conclusions including the various components of how you determined your answer. Q.2 During 2019, Anna had the following transactions: Salary $90,000 Interest income on IBM bonds 3,000 Damages for physical personal injury (car accident) 115,000 Punitive damages (same car accident) 150,000 Stock dividends from Chevron Corp Stock with option to receive cash of $15,000 or stock valued at $22,000 (Anna opted to that the stock) Q.3 Joseph exchanged farmhouse that he used in his farming business for a building used by Sandy in her…
In the current year, Boone inherited 100% of Cane Corporation's outstanding stock from his mother. The stock had a fair market value of $500,000 at the date of death and was reflected on Cane's balance sheet as follows: Cash $500,000 Capital stock 300,000 Accumulated earnings & profits 200,000 Boone immediately withdrew $100,000 out of Cane Corporation as a dividend distribution. Later in the year, pursuant to a plan of liquidation, Boone withdrew the remaining $400,000 out of Cane. For the current year, how much will Boone be required to report as ordinary dividend income and capital gain or loss?Ordinary Dividend Capital Gain or Loss A. $200,000 $200,000 B. $0 $0 C. $100,000 $100,000 D. $100,000 $500,000
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Liquidation expenses are estimated to be $15,000. Prepare a predistribution schedule to guide the distribution of cash. Assume that assets costing $74,000 are sold for $60,000. How is the available cash to be divided?
The Henry, Isaac, and Jacobs partnership was about to enter liquidation with the following account balances:cash 90000 liabilities 60000 Noncash assets 300000 Henry capital 80000 Isaac capital 110000 Jacobs capital 140000 Total 390000 Total 390000Estimated expenses of liquidation were $5,000. Henry, Isaac, and Jacobs shared profits and losses in a ratio of 2:4:4. Before Liquidating any assets, the partners determined the amount of cash for safe payments and distributed it. The noncash asets were then sold for $120,000 and the liquidation expenses of $5,000 were paid. How much of the $120,000 would be distributed to the partners? (Hint Either a predistribution plan or a schedule of safe payments would be appropriate for solving this item.)
Immediately prior to the process of liquidation, partners Paco, Peca, and Pito have capital balances of $80,000, $30,000, and $40,000 respectively. There is a cash balance of $10,000, noncash assets total $190,000, and liabilities total $50,000. The partners share net income and losses in the ratio of 50%, 35%, and 15% respectively. Journalize the entries to record the liquidation outlined below, using Assets as the account title for the noncash assets and Liabilities as the account title for all creditors' claims. 1. Sold the noncash assets for $90,000 in cash. 2. Divided the loss on realization. 3. Paid the liabilities. 4. Received cash from the partner with the deficiency. 5. Distributed the cash to the partners.
Immediately prior to the process of liquidation, partners M, N, and O have capital balances of $70,000, $20,000, and $30,000 respectively. There is a cash balance of $10,000, noncash assets total $160,000, and liabilities total $50,000. The partners share net income and losses in the ratio of 2:2:1. Journalize the entries to record the liquidation outlined below, using “Assets” as the account title for the noncash assets and “Liabilities” as the account title for all creditors' claims. (a) Sold the noncash assets for $80,000 in cash. (b) Divided the loss on realization. (c) Paid the liabilities. (d) Received cash from the partner with the deficiency. (e) Distributed the cash to the partners. (for each Journal Entry, omit the 4th journalizing step of providing a brief explanation) JOURNAL Date Post. DR CR (a)…
Howard Corporation liquidates and distributes $20,000 cash and land with a fair market value of $80,000 to its sole shareholder, Ryan. Ryan also assumes a $12,000 mortgage that is a attached to the land. Ryan’s basis in the stock is $70,000. Compute the amount of gain or loss that Ryan will recognize on the liquidation.